Frequently Asked Question: Can you get a mortgage for an investment (rental) property with 10% down instead of the standard 20% down?
Q: Can you get a mortgage for an investment (rental) property with 10% down instead of the standard 20% down?
A: No, you will not be able to get a mortgage for an investment (rental) property with less than 25% down for two reasons:
- You can not get private mortgage insurance (PMI) for investment properties; and
- Fannie Mae now requires that you put at least 25% down on a single family investment property, and at least 30% down on 2-, 3- and 4-unit properties.
Other Fannie Mae guidelines for investment properties include:
- Borrowers cannot have a history of bankruptcy or foreclosure within the last 7 years;
- When more than four properties are financed, the borrower must have a minimum credit score of 640 for single family investment properties, and a minimum credit score of 680 for 2-, 3- and 4-unit investment properties;
- 6 month's reserves on the first investment property; and
- 2 months reserves on each additional financed investment property;
If you are financing between 5 and 10 investment properties, the following requirements also apply:
- The borrower must have a minimum credit score of 720
- No late payments on any mortgage in the previous 12 months;
- 2 years of tax returns showing rental income from all rental properties; and
- 6 months of PITI reserves (principal, interest, taxes and insurance) on each of the financed properties
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